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Capgemini rises sharply on return to growth

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CIOL Bureau
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PARIS, FRANCE: Shares in Capgemini rose more than five percent on Thursday after Europe's largest computer consultancy beat earnings forecasts and reported accelerating growth in the fourth quarter.

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"There is a recovery under way in this sector even if it is a gradual one," Chief Executive Paul Hermelin said, adding growth had been visible across the board in the fourth quarter.

Capgemini shares rose 5.4 per cent to 41.99 euros by 0837 GMT.

The French company said its operating margin rose to 7.5 per cent in the second half of 2010, from 5.8 per cent in the first half of the year, though this was not enough to erase a wobble in margins over the year as a whole.

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The full-year operating margin dipped 0.3 percentage points to 6.8 per cent of the company's sales, which grew 3.9 percent to 8.7 billion euros.

For 2011, Capgemini predicted revenues would grow 9-10 percent and that it would add 0.5 to 1.0 percentage points to its operating margin.

"The results and guidance are slightly above forecast," a Paris trader said.

However Capgemini said the improved margins would probably be achieved gradually over the full year because of the investments needed to support the pick-up in demand.

Capgemini posted a net 2010 profit of 280 million euros, up 57 per cent, and said it would recommend a 25 per cent dividend hike to 1 euro per share for 2010, recouping the 2008 level.

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